Madigan Bros. v. Melrose Shopping Center Co.

556 N.E.2d 730, 198 Ill. App. 3d 1083, 145 Ill. Dec. 112, 1990 Ill. App. LEXIS 706
CourtAppellate Court of Illinois
DecidedMay 18, 1990
Docket1-89-1616
StatusPublished
Cited by8 cases

This text of 556 N.E.2d 730 (Madigan Bros. v. Melrose Shopping Center Co.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Madigan Bros. v. Melrose Shopping Center Co., 556 N.E.2d 730, 198 Ill. App. 3d 1083, 145 Ill. Dec. 112, 1990 Ill. App. LEXIS 706 (Ill. Ct. App. 1990).

Opinion

JUSTICE McNAMARA

delivered the opinion of the court:

Plaintiff, Madigan Brothers, Inc., sued for breach of contract when the roof collapsed from water damage at the premises leased from defendant, Winston Plaza Associates. Following a trial without a jury, the court awarded $2,610 in damages. Plaintiff appeals, contending that the lease’s exculpatory provisions were without effect pursuant to section 1 of “An Act making void and unenforceable certain agreements ***” (Ill. Rev. Stat. 1981, ch. 80, par. 91), and that it is entitled to certain consequential damages. On cross-appeal, defendant contends that the trial court erred in awarding any damages to plaintiff for destroyed merchandise because the lease provides that plaintiff bore that risk.

This appeal is part of numerous related actions which have spanned a decade. The present suit is limited to damages for a January 1982 collapse of a portion of a roof in plaintiff’s store.

In 1960, plaintiff entered into a lease agreement for department store premises in a shopping center owned by defendant’s predecessor in interest. Sometime prior to 1973, defendant took over as landlord under that lease. In 1973, the premises were expanded to include plaintiff’s Junior Store.

In January 1982, after repeated problems with a leaking roof and unsuccessful attempts to repair the roof, the roof failed, causing plaintiff to shut its Junior Store temporarily. After 54 days, plaintiff reopened the store.

Trial began on March 2, 1989. In addition to plaintiff, its insurer, American Protective Insurance Company, was a plaintiff, but is not a party to this appeal. It had previously been permitted to intervene to recover the $158,000 it had paid plaintiff under a business interruption policy. In addition to defendant, Melrose Shopping Center Company was a defendant at trial, but is not a party to this appeal. Melrose filed a cross-claim against defendant for indemnity. Defendant filed a cross-claim against Melrose for contribution.

At trial, Joseph Madigan, plaintiff’s president, testified for plaintiff. He related facts regarding the leakage, the damage, and the repair of that damage. He testified regarding the markdown of goods moved from the Junior Store to other locations. He also testified regarding replacement of the carpeting in the store.

George S. Iny, plaintiff’s chief financial officer and vice-president, testified for plaintiff that $2,610 worth of goods were ruined. Other goods were shipped to a receiving center and then to its other stores. Some of the goods were marked down before being sold. Iny also testified regarding the replaced carpeting. Iny stated that the store’s reopening costs included banners pulled by an airplane, a disc jockey at the store, balloons, and dancing girls for a total cost of $13,840. Iny said that in the first two months after opening, plaintiff made $160,000 more in profits than it had during the same two months the year prior to and after 1982. He explained that the extra profits were due to successful advertising for the reopening.

Iny also testified regarding plaintiff’s claim of $135,000 for lost income. He explained this was the “gross margin that we would have experienced had we made our planned sales at that store.” Iny denied that any remodeling had been done prior to reopening, but stated that plaintiff spent four times the amount needed to repair the damage, although it only sought the amount needed for repairs.

Defendants offered no witnesses, and all four parties rested.

The court then commented that it would be necessary later to resolve several issues, including the applicability of the statute voiding exculpatory provisions in leases, and the scope of consequential damages under the lease, including the proper measure of damage for the damaged carpeting.

Following all closing arguments, the court made several preliminary rulings, disposing of all issues except those between plaintiff Madigan and defendant Winston. The court sua sponte dismissed American Protective Insurance as a plaintiff. As to Melrose, the court found in its favor and against plaintiff because Melrose was no longer the landlord in January 1982. For the same reason, the court dismissed the cross-claim of defendant against Melrose.

In its written decision, the court found section 1 (Ill. Rev. Stat. 1981, ch. 80, par. 91), voiding exculpatory provisions in leases, not applicable because the lease in effect in 1982 was an extension of the original 1960 lease. The court awarded no damages for lost profits because the lease did not contemplate recovery of lost profits, and because plaintiff failed to present reliable evidence of net lost profits or lost earnings from other stores. The court awarded no damages for salaries expended because such damages were not contemplated under the lease. The court awarded plaintiff $2,610 for destroyed merchandise because it was “the kind of damage that necessarily and directly results from the landlord’s failure to perform his covenant to repair and maintain.” The court found damages for the ruined carpet were recoverable under the lease, but found that plaintiff offered no reasonable basis for the award where it failed to present evidence of the carpet’s original value or value just prior to being destroyed. The court found coverings and containers were recoverable items, but no evidence of value at the time of damage had been offered. No damages were awarded for accounting services or photographer’s costs because they were not the kind of consequential damages within the contemplation of the parties to the lease. Preopening expenses were not awarded because they were not contemplated under the lease, and because no real loss was incurred where profits were substantially higher following reopening.

We first address plaintiff’s contention that the lease’s exculpatory provisions do not apply because the legislature has declared such provisions void. The relevant statute became effective in 1971 and states that real property lease agreements “exempting the lessor from liability for damages for injuries to person or property caused by or resulting from the negligence of the lessor *** in the operation or maintenance of *** the real property *** shall be deemed to be void as against public policy and wholly unenforceable.” Ill. Rev. Stat. 1981, ch. 80, par. 91.

The statute specifically refers to exculpatory lease provisions which relieve the landlord of liability from its own “negligence.” (Ill. Rev. Stat. 1981, ch. 80, par. 91.) The present suit is for breach of contract. Plaintiff admits that it does not allege, and has not proved, negligence on the part of defendant. Thus, the statute would not apply here. See Zion Industries, Inc. v. Loy (1977), 46 Ill. App. 3d 902, 361 N.E.2d 605 (statute not applicable because suit for damage caused by roof failure was based on lease and not on negligence and because lease predates statute).

Plaintiff argues that the statute implies that it covers the landlord’s attempt to avoid liability “based on wrongdoing” generally, either by the landlord’s breach of contract or negligence.

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Bluebook (online)
556 N.E.2d 730, 198 Ill. App. 3d 1083, 145 Ill. Dec. 112, 1990 Ill. App. LEXIS 706, Counsel Stack Legal Research, https://law.counselstack.com/opinion/madigan-bros-v-melrose-shopping-center-co-illappct-1990.